Top 5 takeaways from the 2021 State of Product Data Report
The State of Product Data Report 2021 is finally here. Created in partnership with the Product-Led Alliance, we surveyed PMs from a wide range of companies around the world to understand how product teams are using data. From the key metrics they measure to the tools they use to track them, this report has it all.
Here are the top 5 takeaways from the 2021 State of Product Data Report.
1. Companies tend to source their product data internally
Where your company gets its data is critical to the authenticity and quality of the insights derived from it. Collecting data from a single source—regardless of how trustworthy it is—may result in tunnel-vision product analytics and insights. A lack of counteracting data points could undermine certain aspects of the product’s condition or exacerbate insignificant and rare occurrences.
According to the report, 84% of companies derive their data from internal sources, mainly from their sales and marketing departments. However, just over half (51%) of companies surveyed combine their efforts with competitive intelligence. While industry analytics aren’t strictly necessary to understand how a company is doing with its clients and customers, the lack of competitive analysis could create a bubble around the company’s findings, making it harder for it to understand how its performance measures up to rival brands.
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2. Retention, revenue, and acquisition are the goal
Companies are manipulating, categorizing, and analyzing data in new ways. Instead of making critical business decisions based on instinct or predictions, companies now rely on product analytics to make stronger, data-backed choices, improve their products and services, and strengthen their relationships with existing customers.
But while most companies vary how they collect product data, they all tend to turn to similar tactics when it comes to analytics and testing hypotheses. These techniques include:
- A/B testing
- Real-time user tracking
- User segmentation according to shared characteristics and behaviours
And while what companies plan to do with their findings varies depending on the industry, age, and size of the company, the majority shared the same three goals: retention, revenue, and user acquisition.
Sixty-four percent of survey participants said that their main goal of product analysis is to increase the percentage of users who stick with their brand. Beyond that, 55% of companies are aiming for an increase in revenue, while 50% are focused on acquiring new customers. Those aren’t just blind goals and aspirations: Over half (65%) of the surveyed companies reported having results in the desired direction 12 to 18 months after following advice deduced from product analytics.
In the words of Netali Jakubovitz, the Senior Group Product Manager at Maze, “If you don’t know where you’re going, any road will get you there. Not being data-driven makes the work obsolete. It’s necessary to have a critical view of the work we’re doing, and it would be impossible without data.” Following that view has helped the product testing company that managed to increase their monthly recurring revenue by 600% over the past 12 months.
3. Incorporating customer feedback is essential
While statistics on the condition and performance of products have been shown to be essential in making business decisions, the same doesn’t apply to technical and stylistic choices. Eighty-one percent of companies rely on direct customer feedback as the primary metric for determining how implementing a new feature or design element might increase product usage and satisfaction.
But other elements still play a role in updates and product changes. For instance, 69% of companies rely primarily on usage data when implementing new features, while 64% make use of the rates in which users are engaged with particular features as their primary indicator.
Unsurprisingly, just under a third (31%) highlighted using competitor data in their analysis. Most companies—especially those in tech—are aware of the downsides of copying competitor features and design elements blindly. They understand that to ensure users continue using their product, it’s critical to take into consideration their users’ unique traits, why the users chose them in the first place, and what they’re looking for in future upgrades.
4. The majority of companies don’t have a dedicated product analytics function
Approximately two-thirds (68%) of companies reported not having a dedicated product analytics function in their toolbox. Instead, 60% leave the task of product analytics to their product management department.
But we anticipate a notable shift in this trend over the coming 12 months. With 64% of respondents agreeing that product analytics has helped them achieve their most important goals, there’s validation of the impact product analytics can have on a company’s rate of innovation.
By enabling more people to self-serve user behavior insights, companies can ultimately make data-driven decisions faster. And that’s a shift we can all welcome.
5. Most companies are categorizing their user data by persona
Seventy percent of respondents reported that they segment their product data by persona, which is a big leap from the second and third most prominent data segmentation approaches—39% of companies report categorizing by geography while just 34% categorize by company size.
Unfortunately, data segmentation without rich data won’t leave you with many results. When it comes to applications and digital services, companies choose certain metrics to track by how important they deem each one to be. At the top of the list is how often consumers use the product (75%), followed by the frequency at which each feature is used (68%) and funnel conversion rates (54%). Only 1% reported tracking and analyzing direct customer requests and suggestions.
Where do you fit in?
Understanding how other companies make critical decisions about their data can be of great help to every product manager looking to improve their brand’s products and services. While this year’s State of Product Data Report highlights common trends around how companies collect and analyze their product data, every company has its own mix of approaches and strategies that yield the best results for them. Assess your current product analytics maturity and how to advance it with the Advance Your Product Analytics Strategy report.